Replies Created | Forums | Retire Guy

Forum Replies Created

Viewing 5 posts - 1 through 5 (of 5 total)

Retire Guy
Member
@retire-guy
Join Date: 2010
Post Count: 5
July 5, 2010 - 9:38 am
Excellent!! Retirement is a dirty word!
Retire Guy
Member
@retire-guy
Join Date: 2010
Post Count: 5
July 4, 2010 - 7:11 am
To give you a commercial property investor’s perspective on this….
If a sophisticated property investor (like a listed property trust or similar) were to acquire a hotel property, say a serviced apartment complex in a CBD, they would buy on a NET yield of around 8-9%, as this is reflective of the risk premium attached to tourism properties.
Developers try and sell you these units on a gross RESIDENTIAL yield of around 4-6%, which is NOT reflective of the additional risk you incur with a tourism property.
The difference is yield spread here is pocketed by the developer as a super-charged development margin!
Furthermore, you are open to management risk (how good are the operators?).
Hope this helps…
Retire Guy
Member
@retire-guy
Join Date: 2010
Post Count: 5
July 4, 2010 - 7:03 am
Hi wealth4life,
If you are interested in retirement as an investment sector drop me a line and I will give you some angles you might be interested in.
Just to be clear – I have no interest in the sale of these properties! Just happy to share my knowledge on the sector….
Richard
Retire Guy
Member
@retire-guy
Join Date: 2010
Post Count: 5
July 4, 2010 - 6:55 am
Yeah, be careful with these types of retirement units. There is no established secondary market for them and they take ages to sell.
RE agents typically wont touch them because the low sale price means a low commission – why should they put they same effort into selling a $185k place as for a $300k place and get half the commission?
Also your rent will always be constrained by the age pension and rent assistance allowance, which tenants at that age & stage typically rely on to fund living.
Hope this helps!
Richard
Retire Guy
Member
@retire-guy
Join Date: 2010
Post Count: 5
July 4, 2010 - 6:49 am
Hi Jan,
Be careful with “Over 55’s” complexes as an investment.
1. Villages like these are not typically “registered” retirement villages so confirm what structures are in place to restrict entry age.
2. Many villages have strict “owner-occupier” provisions, so check to make sure you can actually rent it out.
3. The performance of your unit as an investment will also be dependent on the competency of the village manager (in the event that there is one) to let and manage your unit.
4. Your rental market is age-restricted – typically that age group will own their own home. If they don’t by that age it is likely that they cant afford $400 per week. Most rental retirement villages have to set their rent in line with the age pension and rent assistance allowance.
Cheers!
Richard